The Reinvention of Home Buying with Tushar Garg

About Our Guest

Tushar Garg

https://www.linkedin.com/in/tushar-garg-a6837445/

Tushar is the co-founder of Flyhomes, which is an end-to-end real estate brokerage and technology company that empowers home buyers, sellers, and agents to win. Flyhomes transform the home buying experience through comprehensive consumer education, segmented expertise, financial innovation, and on-demand technology. Tushar has previously worked at Microsoft and McKinsey and Company, before deciding to pursue his passion for the real estate market. He and Flyhomes co-founder Steve Lane started the company in 2015 with the goal of reimagining the broken homebuying experience. The company has raised more than $70 million worth of venture funding, and helped more than 1,500 customers close on $1.3 billion worth of homes.

Resources Referenced

LMRE website www.lmre.co.uk

UKPA website www.ukpa.com

Flyhomes www.flyhomes.com  

Insights From This Episode

 – (COVID) has put home at the centre of our lives, so the home is more important than ever before – Tushar Garg

– Once every buyer becomes a cash buyer, which is where we believe the world would go, at that point you won’t necessarily win the home at a low price, but the system would become a lot more efficient – Tushar Garg

– It’s continuously putting people at the heart of it and taking the experience to the next level. That hypothesis, I think is becoming more and more true in these times – Tushar Garg

– Home buying has always been an essential human need, and I think it’s becoming even more central to have a place that you can call your own. And it’s more than just a place to work, it’s a think it’s a place that you feel that you belong, and I think that is becoming so core to everything – Tushar Garg

– Buying has always been just so daunting for people, because there has been no process that’s been designed to simplify home buying – Tushar Garg

Episode transcript

Louisa

Hi everyone and welcome to The Propcast, my name is Louisa Dickins, co-founder of LMRE and board director of the UKPA, and I shall be your weekly host. Each week for 30 minutes, we will be connecting the VC, PropTech startups and real estate professionals globally, and assist in bridging that famous communication gap we all love talking about. So sit back, relax and enjoy the show. Hi, everyone, and welcome to the podcast. Today we are joined by Tushar Garg, CEO and co-founder of Flyhomes and we will be discussing the reinvention of home buying. So welcome to the show, Tushar.

Tushar

Great to be on the podcast with you.

Louisa

And now I bet most people listening in are wondering how Tushar’s products have reinvented the home buy experience and process, which Tushar will go into in a bit. But first, let’s give a bit of background to Tushar’s career. So prior to Flyhomes, Tushar gained experience at Microsoft and McKinsey and Company before deciding to pursue his passion for the real estate market. He and Flyhomes co-founder Steve Lane started the company in 2015 with the goal of reimagining the broken homebuying experience, I’m sure a lot of us have experienced personally, I know I have. Now since then, the Seattle based company has grown to roughly 200 employees, raised more than $70 million worth of venture funding, and helped more than 1,500 customers close on something like $1.3 billion worth of homes, which is pretty spectacular. And now there are a couple of Flyhomes products, one being the cash offer product, otherwise known as the credit card swipe for home buys. And the trade up program, which Tushar will be far better explaining than I will. So we’ll hear about that in a moment. But I thought we might as well get started with the questions. So without further ado, why don’t you tell us how you got to founding Flyhomes, but also why the move from the tech kings Microsoft and the famous top consultancy, Bain?

Tushar

Thanks for that introduction for Flyhomes. Actually, I never thought that I’ll be in real estate or helping people buy houses, but the way it worked out for me was I was at Microsoft doing machine learning and a bit in corporate strategy, and then ended up going to pursue my MBA, and was fortunate to have an opportunity to work with McKinsey, that’s where I met my co-founder Steve, and we took the class budget together to save energy in every house. We realised very quickly that people don’t have good energy in their houses because the capital investment doesn’t get recouped in time and the housing market is opaque to the energy upgrades. So it doesn’t really pay you back if you were to sell your house in the meanwhile. So we said okay, how do we make the housing market more transparent? How can we lead housing across different features, such as discount for the road noise, premium for the view, or the energy features themselves. And we got a brokerage license to have the access to the data to do fun things with it. Meanwhile, I was trying to help my ex boss in Microsoft make a presentation that he needed, and he was going to buy a house that weekend and we were bootstrapping. So we said why don’t we just help you buy a home that maybe we would understand the process and customer needs better, but then also be able to earn enough to bootstrap. He was kind enough to give the opportunity and by Monday, we had helped the first buyer buy the home. And I thought this is a great way to support ourselves and understand the customer behavior. And we did that for about 10 buyers, and honestly it was like super meaningful to see families get into homes, and also having no preconceived notion of how this industry should work. It was clear to see the glaring systemic issues that existed. The industry had never put the customer to the heart of it. And so for us that became the pursuit, which was how do you simplify home buying, whether it’s for the first time homebuyers or for people who are looking to upsize or downsize, which automates a very archaic and complicated process. And that’s the journey we’ve been on so far. It’s been incredibly rewarding.

Louisa

Going from working for these much larger businesses like Microsoft and Bain to starting something from fresh must have been pretty challenging. Any tips for people looking to make that move?

Tushar

I actually feel like my experiences at Microsoft and then my brief time at McKinsey was incredibly helpful actually in the startup journey, you have to certainly unlearn a few things, you didn’t have the support that you needed to become a lot more scrappy in the early stages of the company. But some of the people that I worked with there, the skills I picked up, I found them to be remarkably useful in the journey as we scaled the company. So what I would say is that, I think everybody, the environment we’re in, the people we had were the thing, there’s a lot to learn there, and somehow the dots all connect, when you find the right thing that you’re pursuing for yourself.

Louisa

Definitely. And, okay, let’s get into it, tell us a little bit more about your product or products, and how they really make home buy more seamless. There’s a few products out there who claim they do it, what makes Flyhomes different?

Tushar

So we’re serving two primary audiences are, we serving the first time homebuyers or the people who are looking to just buy a home, and we also helping people who are looking to upsize or downsize, so they already own a home and they’re looking to move to a different home. 6.28 So if you’re a first time homebuyer, not only do we make the whole buying process easier, which is everything from how do you book a tour and see the house efficiently, to how do you know how much to offer for the house, and all kind of systematic research behind the house. So we are taking the ambiguity out of the home buying process, is a very systematic Flyhomes home buying process, which our customers love. And it’s powered by technology in the back, an app that simplifies the whole journey for you, along with a human being who gives a full personal connection, and a team behind them of experts who are doing everything from pricing, to showing you the house, to managing all the closing process for you. And beyond that, I think the biggest thing that we differentiates Flyhomes is, that we turn every homebuyer into an all cash buyer. The hypothesis there is that the sellers and the listing agents are looking for all cash, because they want certainty and speed of closing. And today, the way the home buying works is that every seller and buyer has to close on the exact same day when the buyers get their financing, the long term financing. But we believe that it should change, it should be like the credit card swipe for real estate, where the seller should get the money right away so that they can move on with their lives. And, often they’re looking to buy the next home, or there’s a big issue that’s happening, they’re license or they’re selling the house to begin with. And the buyer should be able to take time to close on their financing, with a lender of their choice, which we have also opened up a mortgage company so we can be a one stop shop has simplified the whole home buying. But you could shop around and if there’s a lender who suits your needs better, that’s no problem.

And so essentially turning everybody into a cash buyer, which simplifies the whole transaction process itself. And also gives a buyer the edge, because they show up as strong cash buyers. And the other thing I would call out here is that the way the idea came to be, was we noticed a lot of the buyers who were perfectly well qualified to own a home, except they didn’t have the cash and would keep losing to the cash offers. In several US markets it’s very competitive and sellers would take an offer that’s lower and perfectly qualified financed offer because of this fear that that sellers have around financing going wrong. And we realised that we know who our buyers are, we as a company can do our due diligence with our buyers to make sure that they won’t fail, and then we can stand behind them and say everybody buyers a cash buyer, which essentially levels the playing field and makes the market more efficient. But also, makes it a lot more fair for the consumers and the people who are trying to buy a home.

Louisa

Yes, so if you’re a strong cash buyer in the US, does it make housing slightly more affordable, as in you’re more likely to get the property?

Tushar

So I think definitely as of where the market is today, a cash buyer is more likely to win a home. In fact, our customers are 77% more likely to win a home in a very competitive market based on our analysis. And you’re also likely to get the home without having to be the highest bidder necessarily. Not everybody has a cash buyer, that’s the advantage that exists. Once every buyer becomes a cash buyer, which is where we believe the world would go, at that point you won’t necessarily win the home at a low price, but the system would become a lot more efficient. And efficiencies just overall makes it fair for everybody. And I think my belief is at that point, the highest bidder should win and it should just be a fair process and the market will be a lot more efficient that way.

Louisa

Customers are always changing, especially during pandemic, but generally when you’re growing a business, what changes have you seen in your customers? And I know your company is based in Seattle, what major changes and trends have you seen?

Tushar

I think the world is going through something that none of us have seen, or could predict exactly how to navigate this, and it’s tragic at several levels. And having said that, I think from a home buying perspective, this has put home at the centre of our lives, so the home is more important than ever before. People, and one of the products I didn’t talk about before is our credit product where we enable people to upsize or downsize without moving from the current home. So you can be in your current home and you can buy a next home, we will buy it for you, and then move you from the current home to the next home, and then come back and sell your current home.

So a product like that is incredibly useful for a time for a time like this, where a lot of people are realizing that they need more space in their home as homes to become where kids go to school, or where you do your work from. And what we found is that a services like ours, which bring trust to the market, which simplify the processes for the customers, and bring a very standard way of servicing from everything from doing virtual tours for you where you could be in a home in your own home, I think protects customers. So at a very high level, there was a lot of ambiguity of course when the COVID broke out in US. And the industry adapted to doing a lot of things online, and making the processes a lot more convenient, you still have to show the home, which we do in the safest possible way, adhering to the guidelines. But outside of that we feel the rush of processes are moving rapidly online. And the customers are looking for services, which have a promise to the customer of a certain level of experience, which of course prioritises not only the safety, but also all situations that can show up in an environment like this.

Louisa

Yes, and so addressing various changes and concerns to do safety and health with your virtual tools. do you look at partnerships with other technologies in ways of enhancing your product, and the service you provide to your customers?

Tushar

We have several partnerships, but I mean in terms of the service services that customers need, whether it’s like the moving service, or listing, or staging service and things like that, so I won’t call it necessarily full-blown technology to do this, we also have partnership with several lending partners that we recommend to our customers for the ones that we can service. But, I think you bring up a good point as experience becomes more and more digital, I think integrating with different platforms is certainly a growth opportunity and a way to take the customer experience to the next level.

Louisa

Yes, I think that’s what everyone’s in a race to achieve is, what is the most customer centric approach and aware to the maintaining customers as well in a market that’s becoming ever more saturated as the months go on. How does Flyhomes help homebuyers get the certainty they need when buying a home in an unprecedented market like this, then?

Tushar

Yes, this is where we have an in house mortgage company. So the way that that this works is we underwrite the homebuyers. So if you’re a first time homebuyer, we do the full underwriting for your mortgage upfront, and make sure that before you know that you want to go buy a home, you know exactly what you can buy. And we believe in underwriting so much that we guarantee your earners money. So if we tell you that he could buy a house up to this level, barring a major precedented event in your life such as job loss or something of that nature, we know that you could get a loan and we would guarantee the full earners money in that situation. So that’s the first one. If you’re looking to upsize, then we will tell you a guaranteed price for your current home, so exactly what the proceeds are going to be in the worst case on your current home. And that way exactly what you could buy for the next home. So that again it reduces uncertainty dramatically, so essentially so we do those two things.

But beyond that, because now our incentives are also like the customers, we are not in the business of buying houses where the customers would fail and we have to go buy those houses, we do due diligence on the houses. Whether it’s understanding the pricing of those houses, our mortgage company, pre appraisals to get an estimate of what the final picture could look like to reduce the risk of any gaps there and coach the customers to make sure that they have enough reserves, if the appraisal was to be short. And also basically we inspect the properties and do a full underwriting of the properties. So by underwriting the customers, underwriting the properties, we bring a level of certainty and there’s only few scenarios where things could go wrong, like somebody could lose a job in the process, which is rare, but has happened in the COVID environment. And in those situations, the good news is that you’re working with us as a company, the sellers get the money, they get to move on. And we have been able to even move our customers to the new house, while they look for the new job, and we just hold on for them for longer.

Louisa

And that covers a bit about my next question about how your business responded to COVID. How was it impacted? What have you seen in terms of customer? It seems like pandemic probably increased your customers, if you’re offering more certainty and ability to help people buy properties in this difficult market.

Tushar

So our businesses, like the main devalue proposition side, the online experience side, all of those things, we got tailwinds for that. Clearly the customers are trusting us more online, the meet us on zoom, they have a phenomenal onboarding meeting, and then we can start booking tours for them, and they can do all of that through the platform. And that’s really empowering, and certainly features have been designed for times like these. I mean, to be honest, homebuying is uncertain at any point for everybody. It just got further accentuated in these moments, I think it became even more at the forefront. The operations part of the business of course was harder, where we were having to give tours, make sure the house registries are closed, working with across different offices, appraisers have to go into the house, some of the lending guidelines around loans are stringent and the customers. So there’s a lot of actual operational things that came in the start of the COVID environment for I would say almost a whole quarter, which had to be navigated. So, it was a very difficult time for I think for most businesses and we weren’t immune to that. And there were things about a business that we have a fundamental hypothesis that customers would like to go buy a house with a brand like Flyhomes, which promises them a certain level of experience. And it’s continuously putting people at the heart of it and taking the experience to the next level. That hypothesis, I think is becoming more and more true in these times. The operations part of the business was harder, and I’m still grateful for everybody in our teams out there, helping customers buy a house in this environment.

Louisa

Yes, definitely. What about if we’re looking at the real estate industry in the long term? How do you think this pandemic will affect it?

Tushar

The several elements that we can explore here, but I think at the heart of it is that consumers are beginning to trust companies like us more and more. And I think there’s just a macro trend of trusting things, more online services, the ones that we’re building, and seeking a much better experience, because that’s how most of our lives are evolving. And I think in that sense, we feel that the experience of rebuilding is going to take the homebuying experience to the next level. And we are pretty well positioned to continue to grow on that tailwind and homes and the importance has become more and more forefront where, work from home trends, whether people go back to the offices partially or fully is to be seen, but clearly the work for home trend is going to be accelerated. Already a lot of people have realised they can get a lot done on their homes.

Which I think again, just means how the home buying would be so central. I mean, home buying has always been an essential human need. And I think it’s becoming even more central to have a place that you can call your own. And it’s more than just a place to work, it’s a think it’s a place that you feel that you belong, and I think that is becoming so core to everything. And then then more macro trends, around how will people move, what’s going to happen between the cities and suburbs? And those are things it’s hard to speculate exactly what those trends would kind of play out. But again, a product like trade up, will enable people to be able to do those things a lot easier than they were ever before. Home buying, home selling, and timing the whole thing to get it right exactly when you’re selling a house to be able to buy the next house was just such a painful and dreadful process that by making that a lot easier, I think it just become a lot easier for people to move, which fundamentally, what would be helpful I think

Louisa

What about at the micro level, we’ve gotten into the macro level in a lot of detail, what are your thoughts on the impact of the micro?

Tushar

The micro level, there’s a lot of things which are going on at the moment. one is the interest rates are at historical low, I mean this is also macro, but every customer is getting impacted with this today. So when you say the micro level, in terms of the service, can you define Lu, what do you mean by the macro level here, like what kind of nuances?

Louisa

More the every day man and women when their first choosing how they’re going to buy property and their first entrance into it?

Tushar

Yes, I think it’s a really great point to start, which is buying has always been just so daunting for people, because there has been no process that’s been designed to simplify home buying and I communicated that to the customers up front. And in my mind, as we standardised those services, it’s the first step of that is to really give a sense to people on where to begin this home buying journey. So I think, right from educating the customers up front, to being and creating an environment where people can have a no pressure conversations, to learn about their own experiences, and in every case its slightly unique and every customer needs it different when you buy a home. So creating content that can give you a really good head start and then allowing you space to be able to control your own journey while getting phenomenal help and a personal level of engagement, I think is what we’re building. And I believe in just demystify home buying and enable a lot more people to buy their first home faster, because a lot of people don’t get started, because they either believe they don’t know where to begin, or they don’t believe that they can compete til they have saved up a lot of money to compete with the cash buyers. So by leveling the playing field, we would start at a lot earlier for people.

Louisa

Yes, well the sooner everyone can start, the better. I think there’s a definite housing crisis going on in the US, Europe. everywhere, so anything technology can do to help that and get people on the ladder. And so I’m conscious of the time, but before we wrap this up, what’s next for Flyhomes? 2021 it’s coming up, what’s next for the product?

Tushar

From our perspective, there’s really three major things. The first one is that we’ve got a pretty good footprint now. We started in Seattle, we are well established in Seattle, we then went to the Bay Area in San Francisco and San Jose and East Bay. And we’ve served hundreds of customers in the Bay Area. And now we launch SoCal, so be LA, Irvine and San Diego, which has been going great, and also Portland and Boston. So we’ve got a pretty good footprint. Our job is to continue to take a service and penetrate the markets deeper and become the way people buy houses in these markets. We’re also looking to expand our footprint to new markets. And I think at the heart of all of this, continue to put the customers first and improving online experience, that offline experience and a one stop shop experience where we’re building a brokerage, a mortgage experience all in one together is kind of what we’re at the moment. And I see 2021 as a continuation of what the journey that we’ve been on, but just acceleration that I’m on that.

Louisa

Awesome. Well, that sounds very exciting Tushar and best of luck of with all of that. And unfortunately, we’re coming to the end of the podcast, but is there any parting bit of information you’d like to share the audience but also what’s the best way to connect with you and Flyhomes?

Tushar

The best way to connect with Flyhomes is either to go to www.flyhomes.com we have a team that’s available 24/7 to answer the questions and help with the home buying journey with no pressure. And, and I’m always available if anybody wanted to reach out to me, its Tushar Gurg can find me on LinkedIn and we will get back to you or [email protected] And I think, honestly my passing bit of information or comment would be homebuying doesn’t have to be as daunting as it is. And we can spend a lot of time learning about what the process looks like, but I think if you just get going and demystify it, then you can find the right time with no pressure to start the journey of home buying. Or, if you’re looking to upsize or downsize, we’re making it easier. So, hopefully, people will take the next step in their own life’s journey, and we’d love to be a part of it.

Louisa

Awesome. I think a key point here to our audience is don’t be afraid to make that leap. But also the key word is demystify, it keeps cropping up and I think it’s so important when it comes down to home buying. And Tushar, thank you so much for coming on the podcast, and I look forward to catching up with you after the show.

Tushar

Thank you. This was fun.

Louisa

Thank you for joining us this week on the Propcast and a big thanks to our special guests. Make sure you visit our website www.lmre.co.uk where you can subscribe to our show. Or you’ll find us on iTunes and Spotify were all good content is found. While you’re at it if you found value in the show, we’d appreciate if you could rate and review us on iTunes or if you could simply spread the word. Be sure to tune in next Tuesday, and I’ll catch you later.